The Philippine Online Chronicles

Months after being hit by typhoons Ondoy and Pepeng, the Philippine government signed a P5.5-billion loan agreement with the Japan International Cooperation Agency (JICA) last week.

According to the Bangko Sentral ng Pilipinas (Central Bank of the Philippines, or BSP), the loan will cover infrastructure and rehabilitation projects for areas hit by the two tragic typhoons, which include counter-measure projects against natural calamities and economic recovery programs for the 10 million victims of the said calamities.

"We hope this project will assist the victims of these calamities, and support and strengthen the disaster mitigation efforts of the Philippine government. As a close friend and neighbor, Japan will continue to support typhoon victims to reconstruct and improve the living environment in the Philippines," said Japan's Ambassador to the Philippines Makoto Katsura.

The said loan has a low interest rate, 0.01 percent per annum, and is payable for 40 years with a 10-year grace period. According to government officials, it will fall under the Arroyo administration's Ondoy and Pepeng Infrastructure Rehabilitation Project, which will be implemented by the Department of Public Works and Highways.

According to the World Bank, the damage incurred by the Philippines from Ondoy and Pepeng amounted to an estimated P200 billion.

The Philippine Daily Inquirer reported that the loan with JICA is “just one of the financial assistance packages” to be obtained by the Arroyo administration for the Ondoy and Pepeng rehabilitation program. It will add to the P4.397 billion outstanding government debt posted last year.